Reducing the climate change impact of everything we buy

1. Reducing the climate change impact of everything we buy Food & Drink Innovation Event: Carbon Footprinting versus Labelling Euan Murray 17th October 2007

2. Agenda • Background to supply chain engagement • Carbon Trust’s pilot product footprinting & labelling work • The Future: standard development, industry engagement & pilot projects

3. The Carbon Trust Who we are: • Independent company, funded by UK Government Our role: • Help organisations reduce their carbon emissions and develop commercial low carbon technologies Last year we: • Worked with >5,000 companies across UK • Identified savings of 4.6 million tCO2 worth £0.5 Billion in cost savings per year

4. What is good carbon management? Stage 1: Direct Company Emissions Reduction Stage 2: Supply Chain Emissions Reduction Stage 3 (Optional): Offsetting

5. What is the footprint of a product? Supply chain / value chain of a can of cola • Aluminium Production • Sugar farming • Cola production • Packaging • Transportation • Chilled storage • Refrigeration • Can collection • Recycling or disposal Total carbon footprint of the can of cola (illustrative) Disposal & recycling Raw material Product manufacturing Consumer use Distribution & retail

6. Agenda • Background to supply chain engagement • Carbon Trust’s pilot product footprinting & labelling work • The Future: standard development, industry engagement & pilot projects

7. Supply chain emissions reductions • Supplier energy efficiency – encouraging them directly • Calculating product carbon footprints – identifying hotspots • Trinity Mirror example

8. Why the “product view” is key • Targets >50% of emissions • Individual carbon footprint of 11 tonnes CO2 p.a. • The UN/IPCC, Kyoto Protocol and China • The market – consumers and brands

9. The business need is growing Cost-saving strategy • Further energy cost savings • e.g. 20% reduction on Boots Shampoo project New market strategy • Consumer demand for companies to take action on climate change • GfK NOP (Oct 2006): 60% of consumers want to buy from companies doing the right thing on climate change • Consumer desire for low-carbon products • Globescan (March 2007): • 60% of UK consumers want companies to provide more PoS information on climate change impacts • 77% want independent assurance of company claims on climate change The word “VERSUS”: Footprinting AND/OR labelling

10. March launch of our work Launch focussed on 4 key things: Product Carbon Footprinting Methodology Product Label Standard development & consultation Defra & BSI British Standards Pilot Development Projects

11. Pilot carbon reduction label • Independent measurement • “Reduce or lose” commitment

12. Carbon labelling: the only solution? • Businesses need to communicate through different channels: • Explanation of climate change impacts and product impacts • Explanation of how consumers can act • Labelling is not a panacea but can be part of the solution: we will learn more through the pilot projects Independent market research shows positive trends • GfK NOP & Globescan • YouGov (Sept 207): 44% would switch to a product with a smaller carbon footprint even if it was not their first preference • Populus Consumer Survey July 2007 • 85% concerned consumers have heard of the carbon reduction label • 68% of all consumers say the label measures ‘The amount of carbon emitted during the whole lifecycle of the product – from ‘seed’ to ‘store’’ • 49% say ‘It makes me more likely to buy their products’ when the label is displayed on pack • 69% agree ‘It demonstrates that the company is committed to reducing its carbon emissions’ • 62% agree ‘It helps me to reduce the carbon footprint of my regular shopping’

13. Agenda • Background to supply chain engagement • Carbon Trust’s pilot product footprinting & labelling work • The Future: standard development, industry engagement & pilot projects

14. Standard Development • BSI are leading the work to develop the PAS Standard • Appointed a Steering Group from business, NGO, academics and government • First draft prepared, using the CT methodology as base • First of two consultations commenced • Details on the BSI website: www.bsi-global.com/PAS2050 • Food & Grocery supply chains heavily involved: • 2 representatives on the BSI Steering Group • Support from IGD, FDF, BRC and NFU • Lots of members of those organisations • Engagement, support and efforts invaluable

15. New Pilot Projects • CT looking to test the draft BSI standard with different products and in different sectors • The companies will work with us to reduce their emissions and explore the best way to communicate the results 10 new projects: • Aggregate IndustriesHard landscaping products • Cadbury SchweppesDairy Milk bars • Coca-Cola A still and a sparkling beverage • The Co-operative GroupStrawberries • Halifax Halifax Web Saver Account • Kimberly-ClarkAndrex and Huggies nappies • MarshallsHard landscaping products • Mϋller Dairy Yoghurts • Scottish & Newcastle Fosters lager & Bulmer’s cider • Tesco 5 different product categories We will do further pilots throughout the year

16. Making Business Sense of Climate ChangeQUESTIONS